The chart above is captured from Chartnexus for Oriental Food on 10th November 2010.
There are two vertical lines showing the two peaks (higher high) showing an uptrend.
These two peaks are formed about six (6) months apart. [first peak on 13th January 2010 and the second higher peak on 23 July 2010]
Another set of Fibonacci Retracement lines are inserted to guage the current state of correction.
If we take the last upswing to start from 25th May 2010 (0% at 1.38) to 23.July 2010 (100% at 2.19) the current (10th November 2010) Fibonacci Retracement level is about 38.2%.
My guess is as follows:
1. Possibly the current level is the bottom building stage. However if this fails to hold the next Fibonacci Retracement level is at 23.6% and it sits at 1.57 (price level)
2. If this bottom building take about six (6) months, the next peak may occur around January 2011.
3. So if you believe that this study is of any value, it will be profitable to accumulate at this level (~ 1.70) and sell your accumulation of this counter sometime in January 2011 at a higher level.
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Written by Lee Huong Sing
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